California Employment Law Report

Three Legal Steps Employers Can Take To Ensure Employees Comply With Company Policy

Anthony Zaller — Fri, 11 May 2012 07:52:11 -0800

The scenario is common: employers have policies in place to protect the employees and the company, but getting employees to comply with the policies is difficult. For example, a company has a policy that employees have to be on-the-clock for during all of the time they are working, but there is one or two employees who habitually forget to clock-out at the end of the day. In addition to the administrative hassles this creates, there are legal issues of how much time the employer should pay the employee for.

Generally, employers are required to pay for all time that the company knows or should have known the employee was working. But legally what can employers do to ensure that employees are complying with company policy?

Starting with what employers cannot do: withhold wages from the employee. The employer cannot use withholding or deductions from wages as a disciplinary measure. This is well settled under California law.

Three Steps Employers Should Take To Have Employees Comply With Policies

1. Have well written policies.

It goes without saying, the policies need to be legal and clearly written so that employees and managers can easily understand the policies.

2. Train managers so that they understand the policies and know how what to enforce.

Managers who do not understand what they should be requiring of employees, or worse, misinterpret a company policy when enforcing it, can create a lot of legal liability for the company. Routine training for managers on common issues that arise in the workplace can do a lot to prevent litigation.

3. Discipline employees for failure to comply with the policies.

While employers cannot withhold wages as a form of discipline, employers may still write up employees who violate company policies. For example, if an employee is either intentionally or otherwise not properly recording their time, they should be counseled and written up for the violations. They also need to be warned that if the problem continues, they could be terminated. There is another benefit to having this documentation. If the company is sued in a wage and hour class action for off-the-clock work, the plaintiffs need to prove that there is a company-wide policy that permits or encourages off-the-clock work. If the company has the records of disciplining employees who were abusing the time clock system, it will be strong evidence that the company actively prohibited off-the-clock work from occurring.

Can Employers Ask For Applicants' W-2 or Tax Returns?

Anthony Zaller — Thu, 03 May 2012 16:26:08 -0800

First it was Facebook passwords, now it is financials. It is becoming more regular that employers ask job applicants for a W-2 or tax returns in order to verify past salary or employment information. Kathleen Pender of the San Francisco Chronicle wrote a story on this interesting issue. Given the tough job market, many job seekers are feeling obligated to provide such information. While many people have the gut reaction that this type of request is improper, as the article notes, there is arguably nothing legally that limits employers from asking for this information.

Of course, the improper use of this information could result in liability for the employer who obtains the information. And, as noted in the article, employers who ask for this information only from individuals in protected classes (such as for race, gender, etc…) would be violating discrimination laws.

It is also interesting to note that the newly adopted Labor Code provision that only allows employers to conduct credit checks (referred to as a consumer credit report in the law) for certain types of employees, provides an exclusion that allows employers to ask for information that verifies income or employment. The law, Labor Code section 1024.5 took effect at the beginning of this year, and defines a consumer credit report as follows:

(1) "Consumer credit report" has the same meaning as defined in subdivision (c) of Section 1785.3 of the Civil Code, but does not include a report that (A) verifies income or employment, and (B) does not include credit-related information, such as credit history, credit score, or credit record.

Because a consumer credit report is defined as excluding verification of “income or employment,” employers asking for W-2s or tax returns would not trigger this provision of the Labor Code. However, as the article notes, it appears that employers are incorporating requests to verify applicant’s pass salary as part of a general background check process. Depending on the facts on the type of information obtained in the background check, it could be argued that the overall background check conducted in these circumstances may constitute one that is covered by Labor Code section 1024.5. If that is the case, the employer has additional objections under the law, and may actually be restricted from performing the background check in the first place.

Plaintiff Cannot Bring Class Action In Arbitration Even When Arbitration Agreement Is Silent On Issue

Anthony Zaller — Mon, 30 Apr 2012 09:08:40 -0800

In Kinecta Alternative Financial Solutions v. Superior Court (wrd) held that a trial could improperly ordered a wage and hour class action to proceed in arbitration as a class action. The appellate court held that even though the arbitration agreement was silent on whether the parties agreed to arbitrate class claims, the fact that the agreement only referenced plaintiff’s claims against the employer (not other employees’ claims as well) the plaintiff could only bring her individual claims in arbitration.

The plaintiff signed an arbitration agreement that provided to arbitrate all disputes arising out of her employment. The arbitration agreement was silent on the issue of class arbitration. Plaintiff filed a class action complaint alleging various wage and hour violations including failure to pay overtime and failure to provide meal and rest breaks. The employer filed a motion to compel arbitration and a motion to dismiss plaintiff’s class claims. The issue the court addressed was whether the employer in this case could be compelled to arbitrate a class action when the arbitration agreement does not expressly provide for a class arbitration.

In agreeing with the employer, the Court held that even though the arbitration agreement was silent on class arbitration, it cannot be assumed that the parties agreed to arbitration class claims. Relying upon the recent United States Supreme Court rulings, the court held:

This petition is governed by Stolt-Nielsen v. Animalfeeds International Corp. (2010) 559 U.S. __ [130 S.Ct. 1758], which holds that under the [Federal Arbitration Act], a party may not be compelled to submit to class arbitration unless the arbitration contract provides a basis for concluding that the party agreed to do so. The arbitration provision in this case expressly limited arbitration to the arbitration of disputes between Malone and Kinecta. The arbitration agreement made no reference to, and did not authorize, class arbitration of disputes. Thus the parties did not agree to authorize class arbitration in their arbitration agreement, and the order denying Kinecta’s motion to dismiss class claims must be reversed.

The arbitration agreement in this case only made reference to the plaintiff, by referencing “I”, “me,” and “my.” The agreement never made reference to other employees or groups of employees. Under the Federal Arbitration Act a party cannot not be compelled to submit to class arbitration unless there is a contractual basis for concluding that they agreed to do so. The mere silence on the issue of class arbitration in an arbitration agreement cannot be interpreted to mean that a party agreed to class arbitration. Therefore, the court held that plaintiff’s lawsuit could only proceed on her own individual claims in arbitration.

Employers should carefully examine whether or not arbitration agreements are appropriate for their company. There are some negative aspects of entering into arbitration agreements, but the ruling in Kinecta is a good example of the enforceability of class action waivers in arbitration agreements.

For more information about arbitration agreements, and the enforceability of their terms, please see my previous post, Things You Wanted To Know About Arbitration Agreements In California, But Were Afraid To Ask.

Meal and Rest Break Compliance After Brinker v. Superior Court

Anthony Zaller — Mon, 23 Apr 2012 08:09:07 -0800

Have you attended webinars and read new legal updates on the new Brinker decision and still uncertain on how this applies to your company? Realizing that employers need to take a more active step in ensuring they are in compliance with the new decision, I've developed a package that actually assists employers in drafting and implementing a meal and rest break policy tailored to their business:

A draft of meal and rest break policy to comply with the standards set forth in Brinker.
Video presentation covering overview of Brinker (1 hour) and presentation materials.
1/2 hour consultation for implementing meal and rest break policy tailored to your company.

The California Supreme Court made it clear in its decision that different industries and facts will either prohibit or permit employers from requiring different standards regarding the timing and offering of meal and rest breaks under California law. General advice from webinars and articles are not sufficient to ensure companies are in compliance with the clarifications set forth in the decision. The cost of the package is a flat fee of $450.

More information about the compliance package is listed here.

NLRB's Attempt To Require Workplace Poster Is Temporarily Stopped

Anthony Zaller — Fri, 20 Apr 2012 12:14:23 -0800

Here in California the Brinker decision has taken up most of my time over the last week. Now I am finally able to focus on a national issue - as the Court of Appeals for the District of Columbia blocked the NLRB from requiring employers to post a notice of employee rights. The court’s decision comes after the federal court in South Carolina ruled that the NLRB exceeded its authority by requiring employers to post notices in the workplace.

The DC appellate court held:

The uncertainty about enforcement counsels further in favor of temporarily preserving the status quo while this court resolves all of the issues on the merits.

On April 17, the NLRB issued a statement setting forth its position:

The agency disagrees with and will appeal last week’s decision by the South Carolina District Court, which found the NLRB lacked authority to promulgate the rule.
Chairman Mark Gaston Pearce said of the recent decisions, “We continue to believe that requiring employers to post this notice is well within the Board’s authority, and that it provides a genuine service to employees who may not otherwise know their rights under our law.”

The NLRB’s website, which explains the notice, also sets forth:

The DC Circuit Court of Appeals has temporarily enjoined the NLRB’s rule requiring the posting of employee rights under the National Labor Relations Act. The rule, which had been scheduled to take effect on April 30, 2012, will not take effect until the legal issues are resolved. There is no new deadline for the posting requirement at this time.

From the docket, it appears that the matter is set for oral argument in September of 2012. So it is unlikely that the NLRB will attempt implement the poster in workplaces prior to this date. My previous post on the topic is here.

When Do Employers Have To Offer Meal And Rest Breaks? Analysis Of Brinker Corp. v. Superior Court

Anthony Zaller — Thu, 19 Apr 2012 10:11:54 -0800

It has been a week now since the California Supreme Court issued its decision in Brinker Restaurant Corp. v. Superior Court. I’ve been getting a lot of questions, and have spoken on the topic a few times, and thought a couple of charts illustrating the Court’s holding would assist in understanding the decision. For a more general discussion of the Brinker decision, please see my previous article.

Meal Periods

The California Supreme Court made clear in Brinker that employers need to give an employee their first meal break “no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10^th hour of work.” The Court said that contrary to Plaintiff’s argument, there are no additional timing requirements for the meal breaks.

I’ve created this chart to help illustrate this point:

If an employee begins work at 8:00 a.m., the employee must start his break by 12:59, which is before the end of the 5^th hour of work.

Another issue in the case was Brinker’s policy of “early lunching.” Early lunching is when employers allow the employees to take their meal break within the first hour or two of arriving for work. Once the employee is given this first meal period, then they would continue to work for six, seven, eight, or more hours without an additional meal break. The Court rejected Plaintiff’s argument that this policy violated the law. The Plaintiff argued that the law required employers had a duty to provide meal breaks on a “rolling five” hour basis, or every five hours.

Here is a chart that provides an example of an early lunching practice:

Before employers begin to employ an early lunching policy, they should do so with caution and some guidance. As Court cautioned employers that: “in the context of an eight-hour shift, ‘[a]s

a general matter,’ one rest break should fall on either side of the meal break. Shorter or longer shifts and other factors that render such scheduling impracticable may alter this general rule.”

Rest Breaks

As for of rest breaks, the Court set forth that, “[e]mployees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.” The Court’s holding can be summarized as follows:

In regards to when during the shift rest breaks should be taken, the Court held that “the only constraint of timing is that rest breaks must fall in the middle of work periods ‘insofar as practicable.’” The Court stopped short of explaining what qualifies as “insofar as practicable”, and employers should closely analyze whether they may deviate from this general principle.

Brinker: California Supreme Court Clarifies Meal And Rest Break Requirements

Anthony Zaller — Fri, 13 Apr 2012 02:07:45 -0800

Brinker Restaurant Corp. v. Superior Court (Hohnbaum) was finally decided by the California Supreme Court. The decision was anxiously awaited by many due to its clarifications of California employment laws regarding the duties employers have regarding offering meal and rest breaks, and when the breaks need to be taken. The primary holding of the case is that employers do not need to ensure that no work is performed during meal breaks. The Court, however, cautioned employers that they cannot undermine formal policies by pressuring employees to work during breaks. Also of interest, as explained below, the Court provided a clarification of the rate that employees accrue rest breaks, which varies from how most employers interpreted the rest break requirement.

Meal Periods
Employers Have No Duty To Ensure Meal Breaks Are Taken

The Plaintiff in the case argued that Brinker had to “ensure that work stops for a the required thirty minute[]” meal period. Alternatively, Brinker argued that under California law employers only had to provide meal periods and would not incur any liability if the employee did not take the break. The Court explained:

[Plaintiff] Hohnbaum contends an employer is obligated to “ensure that work stops for the required thirty minutes.” Brinker, in a position adopted by the Court of Appeal, contends an employer is obligated only to “make available” meal periods, with no responsibility for whether they are taken. We conclude that under Wage Order No. 5 and Labor Code section 512, subdivision (a), an employer must relieve the employee of all duty for the designated period, but need not ensure that the employee does no work.

The Court clarified that employers do not need to ensure that employees do not perform any work during their break:

The difficulty with the view that an employer must ensure no work is done—i.e., prohibit work—is that it lacks any textual basis in the wage order or statute. While at one time the IWC’s wage orders contained language clearly imposing on employers a duty to prevent their employees from working during meal periods, we have found no order in the last half-century continuing that obligation. Indeed, the obligation to ensure employees do no work may in some instances be inconsistent with the fundamental employer obligations associated with a meal break: to relieve the employee of all duty and relinquish any employer control over the employee and how he or she spends the time.

The Court also provided further clarification as to what meal period obligations employers have:

[T]he wage order’s meal period requirement is satisfied if the employee (1) has at least 30 minutes uninterrupted, (2) is free to leave the premises, and (3) is relieved of all duty for the entire period.

Therefore, the Court held:

To summarize: An employer’s duty with respect to meal breaks under both section 512, subdivision (a) and Wage Order No. 5 is an obligation to provide a meal period to its employees. The employer satisfies this obligation if it relieves its employees of all duty, relinquishes control over their activities and permits them a reasonable opportunity to take an uninterrupted 30-minute break, and does not impede or discourage them from doing so. What will suffice may vary from industry to industry, and we cannot in the context of this class certification proceeding delineate the full range of approaches that in each instance might be sufficient to satisfy the law.
On the other hand, the employer is not obligated to police meal breaks and ensure no work thereafter is performed. Bona fide relief from duty and the relinquishing of control satisfies the employer’s obligations, and work by a relieved employee during a meal break does not thereby place the employer in violation of its obligations and create liability for premium pay under Wage Order No. 5, subdivision 11(B) and Labor Code section 226.7, subdivision (b).

However, the Court also provided a warning to employers that, “On the other hand, an employer may not undermine a formal policy of providing meal breaks by pressuring employees to perform their duties in ways that omit breaks.”

Meal Period Timing Requirements

The Court also clarified when meal periods must be provided. The Court rejected Plaintiff’s argument that Brinker’s policy of “early lunching” violated the Labor Code. Early lunching is which is when employers allow employees to take their meal break within the first hour or two of arriving to work, and then have the employees continue to work to the end of their shift without taking another meal period. The Plaintiff argued that the Labor Code requires that employees take a meal period every five consecutive hours of work. In rejecting the Plaintiff’s argument, the Court stated:

Hohnbaum contends section 512 should be read as requiring as well a second meal period no later than five hours after the end of a first meal period if a shift is to continue. The text does not permit such a reading.

The Court explained the timing requirements of meal periods as follows:

We conclude that, absent waiver, section 512 requires a first meal period no later than the end of an employee’s fifth hour of work, and a second meal period no later than the end of an employee’s 10th hour of work.

Rest Periods
Rate Rest Periods Accrue To Employees

The Court began its explanation of the rate at which rest breaks must be given to employees by examining Wage Order No. 5. The Court focused in on subdivision 12(A) of the wage order, which provides:

Every employer shall authorize and permit all employees to take rest periods, which insofar as practicable shall be in the middle of each work period. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof. However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half (3½) hours.

The Court explained that “major fraction thereof” as applied to the four hour period referenced in the Wage Order means “any amount of time in excess of two hours – i.e., any fraction greater than half.” Therefore, by applying this calculation under the wage order, the Court held:

Employees are entitled to 10 minutes’ rest for shifts from three and one-half to six hours in length, 20 minutes for shifts of more than six hours up to 10 hours, 30 minutes for shifts of more than 10 hours up to 14 hours, and so on.

Timing Of Rest Breaks

The Court disagreed with the Plaintiff’s argument that rest breaks had to occur before meal breaks under the law. The Court held that the only “constraint on timing is that rest breaks must fall in the middle of work periods ‘insofar as practicable.’” The Court explained:

Hohnbaum asserts employers have a legal duty to permit their employees a rest period before any meal period. Construing the plain language of the operative wage order, we find no such requirement and agree with the Court of Appeal, which likewise rejected this contention.

...

Either the rest period must fall before the meal period or it must fall after. Neither text nor logic dictates an order for these, nor does anything in the policies underlying the wage and hour laws compel the conclusion that a rest break at the two-hour mark and a meal break at the four-hour mark of such a shift is lawful, while the reverse, a meal break at the two-hour mark and a rest break at the four-hour mark, is per se illegal.

The entire decision can be read from the Supreme Court's website here (PDF) (WRD). I will definitely have more thoughts on this decision in the near term, and will be reviewing it in further detail over the weekend in preparation for the webinar my partner, Dan Turner and I will be conducting next Wednesday addressing the full impact the Brinker decision will have on employers.

Brinker v. Superior Court Decision To Be Published Tomorrow

Anthony Zaller — Wed, 11 Apr 2012 11:40:39 -0800

The California Supreme Court announced today that the opinion in Brinker v. Superior Court (Hohnbaum) will be published tomorrow at 10:00 a.m. The opinion will address many issues surrounding meal and rest break requirements under the California Labor Code, such as whether employers need to ensure or simply provide meal breaks, and when breaks should be taken during a shift.

For more information on the decision we will be holding a webinar next Wednesday at 10:00 a.m. PST. Registration information is here.

New NLRB Poster Required For Most Employers By The End of April

Anthony Zaller — Mon, 09 Apr 2012 11:24:16 -0800

There has been a lot of debate and legal action about the NLRB’s new posting requirements. However, as it now appears, most employers (union and non-union) will be required to post a new NLRB poster by April 30, 2012.

For more information about the new poster, visit the NLRB’s website here. Of particular importance is to determine if your company is required to post the poster, and that information can be found here. Employers can simply print the poster from the NLRB's website.

There has been a lot of discussion about the legality of this new posting requirement, but I generally agree with Daniel Schwartz of the Connecticut Employment Law Blog that this poster is just another one to put on the wall. Daniel points out that employees are probably more likely to Google some question before they go to the lunch room wall full of notice requirements. Will it really change things much? Probably not given that employees can access all of this information, and more on their smart phone.

Webinar - The Impact of Brinker: Understanding The Supreme Court's Decision On Meal & Rest Breaks

Anthony Zaller — Tue, 03 Apr 2012 13:51:13 -0800

Be among the first in California to understand the complete impact the monumental decision in Brinker v. Superior Court will have on employers. The Court’s decision is expected on April 12, and Anthony Zaller and Daniel Turner will analyze and discuss the impact of the decision. The webinar will explain the decision and what it means for employers and wage and hour class actions, discussing among other items:

Can meal periods be offered to employees, or do they need to be ensured?
When during the shift can meal and rest periods be taken?
What does the Court’s ruling mean for the status of meal and rest break class actions and class certification issues?
What is the impact for cases currently being litigated?

The cost is $150 per connection.

Date: Wednesday, April 18
Time: 10:00 a.m. PST

Click here to register. Existing clients can email us here to have the fee waived.

Employees Need To Take Control Of Their Online Identities

Anthony Zaller — Tue, 03 Apr 2012 09:05:34 -0800

The recent (and not too recent) flurry of attention that has been given to the issue regarding whether employers can ask applicants and employees for their Facebook passwords is a good review of what is appropriate conduct for employers, but it is also a good reminder to employees that what they do online is of critical importance to their employment. Asking employees for passwords to social media account may cross the line. But how about Googling an applicant’s or employee’s name to find out more about them? This is not even an issue – or should not be one – given that this information is open to the public. I’ve even argued in the past that it could be negligent for an employer not to do this basic background internet check.

The Internet affords employers the ability to see beyond a resume to make better informed hiring decisions. If fact, Dorie Clark of the HBR Blog Network makes the point that everyone’s online presence is critically important to their professional careers. Dorie notes:

Sure, they probably have a Facebook account, and they may even be on Twitter. But they don't recognize that these are no longer personal communication tools, or a means of strengthening weak ties across their networks. Instead, they are the criteria by which you will be evaluated in the future. Just as Michael Deaver ensured that Ronald Reagan always stood in front of a perfect, picturesque backdrop — and set the standard for all subsequent leaders — you're now responsible for curating your image.

Dorie makes the observations that with the Internet: (1) your reputation always precedes you, (2) if you’re invisible online, you’re probably a fraud, (3) you progress or you stagnate (i.e., you create a valuable source of content through your twitter feed, blogging, etc…).

My interview with Guy Kawasaki last year discussed many of the same points. Guy noted that if you don’t have a Facebook page, or any other online presence, it will raise some questions about you. Are you not technical enough to get onto social media platforms? Are you hiding something?

Everyone Needs To Calm Down About Social Media And The Law

Anthony Zaller — Fri, 30 Mar 2012 12:26:19 -0800

I would love to be able to tell my clients that the Internet and social media has created a very complex set of legal issues that requires them to hire me in order to help develop all new handbook policies, change the way they conduct background checks on applicants, and monitor their employees. However, unfortunately, this is not the case. Employers and employees need to calm down a bit. I cringe when I hear employment lawyers (and Facebook’s Chief Privacy Officer recent comments about employers asking to have employee’s Facebook passwords) advising people to refrain from using the Internet to do background checks on applicants because it may reveal that they are in a protected category, and then this could (possibly) be grounds for a discrimination case. Are these same lawyers advising their clients not to conduct interviews because during a face to face interview the employer will learn the same information? And just because the employer knows that an applicant or employee is in a protect class does not mean that discrimination occurred if it takes an adverse employment action against the applicant or employee. Sure, all employers are subject to frivolous legal actions. But, as I tell my clients, there are only two things my clients and I can control: (1) the advice I give them about how to act according to the law, and (2) whether my clients listen to my advice and act accordingly. The one thing we cannot control, no matter how hard we wish we could, is being able to stop people from filing a baseless lawsuit.

We’ve had the Internet since the 1970’s, and it became mainstream in the 1990’s. I would argue that most people (at least in the U.S.) have had experience on the Internet for at least a decade now. There has not been a lot of case law that has changed the way employment lawyers advise their clients on new human resources policies given the advent of the Internet and social media.

Have the courts simply not caught up with these "new" developments?

As typical lawyers always suggests at this point - courts are slow to deal with emerging technology issues, but I don’t think that is a play here. Courts are slow, but we’ve been actively using the Internet for a decade now. They are not that slow, and I think rather that the rules that were already in place and governed employer’s and employee’s activities were and still are sufficient in addressing the vast majority of the employment issues involving the Internet and social media. Sure, on the fringes there are a few technical items that may be the exception to this, but for the vast majority of employers the Internet and social media does not change much about how HR should conduct itself. The basic analysis regarding monitoring and employee’s off work conduct and right to privacy – the issues usually at play in these types of cases – is the same if the conduct at issue was done off the Internet. I would even argue that privacy cases usually are easier when it involves a posting on the Internet, as no one has any reasonable expectation of privacy in such a public disclosure.

What about social media policies?

That usually leads to the next question, “What about social media policies?” Again, most employers probably don’t need a specific social media policy. And a basic policy (if you really think a social media policy is necessary) that the employer may terminate or discipline an employee for anything they do on the Internet if the employer could terminate or discipline the employee if the conduct at issue did not occur on the Internet would normally be sufficient.

Employers, lawyers, and employees need to take a step back and realize that even though we have these great new technological advances, the law developed before this technology does a pretty good job at resolving these issues in the employment context.

Statistical Analysis of Labor Commissioner Rulings Shows Inconsistencies

Anthony Zaller — Fri, 23 Mar 2012 12:01:46 -0800

When faced with a hearing before the California Labor Commissioner in a Berman hearing, employers and employees alike expect to get a fair, consistent hearing to settle wage disputes. However, as Brian Sumers of the Daily Journal points out this is not always the case. His article (subscription required) provides an analysis of the inconsistencies that arise in holdings of cases heard by the Labor Commissioner’s office. It found that on average the deputy labor commissioners favor employees in about 80% of the cases they hear. In addition, the article analyzes how often specific deputy labor commissioners rule for employers or employees, and notes that the outcome varies drastically on the office and the deputy labor commissioner hearing the case. I’m quoted in the article as saying my experience has been consistent with this statistical analysis. The Labor Commissioner’s office states that it is focusing on additional training for the deputy labor commissioners to ensure a consistent enforcement of the wage laws.

Employers facing labor commissioner hearings need to ensure they are well prepared for the Berman hearings. Even though the same rules of evidence do not apply in Berman hearings as in civil court, the hearings are recorded and the parties testify under oath. Therefore, even if the deputy labor commissioner’s findings are against the employer, it is important to develop a record at this stage of litigation in order to establish the positions on appeal before a judge in superior court. For more information about hearings before the Labor Commissioner and how to prepare for them, see my previous posts here and here.

Employers Requiring Employees To Provide Facebook Passwords

Anthony Zaller — Thu, 22 Mar 2012 07:42:00 -0800

There are more reports of employers requiring applicants and employees to provide their passwords to their Facebook pages so that the employers can get a more accurate view of the employee’s character. I wrote about this issue a couple of years ago regarding the City of Bozeman requiring passwords from applicants. Apart from being a bad recruiting move, I believe it could arguably run afoul of California law as well.

Legality aside, employers that require this information will simply not get qualified applicants. I expect that most applicants or employees would simply refuse to provide this information. In addition, only people that don’t use social media much would have no problems with turning over their passwords. But companies need employees who understand social media these days, not someone who lacks initiative and some basic curiosity to at least log on to Facebook to see what the rest of the world is talking about.

In addition, there may be some real challenges against employers in California who require this information. First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. A person’s privacy expectation in their Facebook posts is very low since it is on the Internet. But one could argue that off-work conduct (which includes Facebook activity) is part of the employee’s privacy right recognized in the California Constitution.

Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

For example, in Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an independent public policy that provides employees with any substantive rights, but, rather, merely establishes a procedure by which the Labor Commissioner may assert, on behalf of employees, recognized constitutional rights. Therefore, in order to prevail on his wrongful termination claim, Barbee must establish that his employment was terminated because he asserted civil rights guaranteed by
article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer, and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee ... because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….”
Unfortunately, there are not many reported cases dealing with these issues. However, with the ubiquity of Facebook and other social medial sites, legislatures and courts will undoubtedly need to weight into these issues.

The Enforceability of Class Action Waivers In The Employment Context

Anthony Zaller — Mon, 19 Mar 2012 08:13:15 -0800

The National Labor Relations Board (NLRB) recently held in D.R. Horton, 357 NLRB No. 184, that a class action waiver in an arbitration agreement was unenforceable as it violates employees’ rights under the National Labor Relations Act (NLRA). Specifically, it held that employees have “the right ‘to engage in…concerted activities for the purpose of collective bargaining or other mutual aid or protection…” under section 7 of the NLRA and therefore any waiver to participate in class actions violates this right.

However, since the D.R. Horton decision courts have upheld class action waivers in the employment context and have rejected the NLRB’s reasoning in D.R. Horton as inconsistent with the United States Supreme Court’s holding in AT&T Mobility v. Concepcion, which permitted class action waivers in arbitration agreements. For example, in LaVoice v. UBS Financial Services, Inc. (S.D.N.Y.), the plaintiff brought a putative class action alleging various wage and hour violations of the Fair Labor Standards Act and New York labor laws. In rejecting the reasoning of D.R. Horton, the court held that:

Given that the Supreme Court held in AT&T Mobility that ‘[r]equiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA,’ this Court must read AT&T Mobility as standing against any argument that an absolute right to collective action is consistent with the FAA’s ‘overarching purpose’ of ‘ensur[ing] the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings. To the extent that [plaintiff] relies…on the recent decision of the National Labor Relations Board (‘NLRB’) in D.R. Horton, Inc. and Michael Cuda, Case 12-CA-25764, January 2, 2012, as authority to support a conflicting reading of AT&T Mobility, this Court declines to follow [that] decision[].

As I’ve written about previously, this area of the law is quickly changing. There is no doubt that new decisions this year will continue to add to the development of this area of the law.

Top iPad Apps For Human Resources

Anthony Zaller — Wed, 07 Mar 2012 07:27:38 -0800

Apple is announcing the iPad 3 today, and given that it’s probably going to dominate the news cycle, I decided I should join in the hype. Don't get me wrong, the iPad is great, and I use mine very day. People use iPads to fly airplanes, play instruments, avoid getting lost by using the sun as a compass, helps doctors care for patients. Did I mention that you can use it to fly an airplane?

The iPad can also lend the HR professional a helping hand. Here are some apps I recommend for HR professionals to assist them in their day-to-day jobs:

1. Evernote [Free (upgrade to premium account for $5.00 per month or $45 per year)]

This is a very popular app generally speaking. It is a great app to organize all types of data - notes, documents, even business cards. For HR managers, I could easily see this app being used to set up a folder for each employee, and uploading information regarding employees' personnel file, disciplinary actions, and notes for day-to-day employee counseling. All content on Evernote is searchable - even PDFs. I use it to help me keep my personal items organized as well. In fact, I'm using Evernote to write this article. All data is stored on the cloud, and can be synced with your computer also.

2. Sugar Sync [5GB free, additional storage plans start at $4.99 per month or $49.99 per year]

This app is great for syncing various work computers so that a document you created on your laptop is accessible on your desktop. It also stores your documents in the cloud, so if you are at a remote location or at home, you can still access your documents.

3. UPad [$4.99]

I use this app to take notes on PDFs. It has great functionality. It can also be used as a memo pad to take hand written notes. If you are giving presentations through your iPad (see #10 below) it could also be incorporated into your presentation to highlight relevant portions of policies or documents you are discussing.

4. Holiday Plus [$0.99]

List of US holidays. Provides week number and number of days until the next holiday.

5. Calendar Card [Free]

List of holidays in 123 countries for HR managers with an international workforce.

6. LinkedIn [Free]

Manage your LinkedIn account on your iPad. By the way, you also need to join the California HR Network group.

7. Interview Questions Pro [Free]

This is primarily for employees preparing for an interview. However, it provides some good questions to use in interviews. Has sample questions for: candidate issues, behavior issues, work history, and critical thinking. Oh, did I mention the price - free.

8. Employee Tracker Pro [$5.99]

I always tell my clients to document, document, document. When facing the business of the workday, documenting employees' accomplishments and infractions often goes undone. This app can be used to solve that issue. Enter employees' names, and then the app allows the user to document good or bad behavior, date and time, supervisor on duty, and a description. The records can then be sent by email.

9. Direct Report: Employee Feedback Tracker for iPad [$4.99]

Another app to record employee feedback. Now there are no excuses for failing to document employee conduct!

10. Keynote [$9.99]

Apple's alternative to PowerPoint. Great app for presentations. Connect your iPad to an external display or projector, and you can leave your laptop in the office.

Bonus: 11. GoToMeeting [Free]

Keep up with your continuing education credits by attending webinars and meetings through GoToMeeting.com on your iPad. Interested in testing this app out? Drop me an email to attend my next webinar on policies California employers need to have in their handbooks.

So what are you waiting for? Get your company to buy you that new iPad3.

Have any additional recommendations for apps you like to use? Add them to the comments section.

Things You Wanted To Know About Arbitration Agreements In California, But Were Afraid To Ask

Anthony Zaller — Thu, 01 Mar 2012 14:28:07 -0800

What is an arbitration agreement?

Employers can agree that they and any employees who enter into an arbitration agreement will resolve their differences before a private arbitrator instead of civil court. There are many different arbitration companies to choose from, but the American Arbitration Association and JAMS are two of the larger ones that are routinely appointed in arbitration agreements.

Are they enforceable in California?

Generally speaking, if the agreement is drafted and implemented properly, they are. However, arbitration agreements are routinely struck down by courts if they are not properly drafted. For example, recently a California court held in Ajamian v. CantorCO2e, that an arbitration agreement was not enforceable because it required the employee to waive statutory damages and remedies and only allowed the employer to recover its attorney’s fees if successful, not the employee.

Why would employer want to implement arbitration agreements?

There are a number of reasons. The arbitration process can proceed more quickly than civil litigation, saving a lot of time and attorney’s fees in the process. For example, often times the discovery process moves more quickly, and if there are any disputes, the parties can raise them with the arbitrator telephonically, instead of the lengthy motion process required to resolve disputes in civil court. The arbitration process is also confidential, so if there are private issues that must be litigated, these issues are not filed in the public records of the courts. The parties also have a say in deciding which arbitrator to use in deciding the case, whereas in civil court the parties are simply assigned a judge without any input into the decision. This is very helpful in employment cases, which often times involve more complex issues, and it is beneficial to the parties to select an arbitrator that has experience in resolving employment cases.

Are class action waivers enforceable in arbitration agreements?

Yes. Two recent U.S. Supreme Court cases, AT&T Mobility v. Concepcion and Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp. have established that class action waivers in arbitration agreements are enforceable. However, Plaintiffs continually challenge class action waivers on numerous grounds, and it is critical employers’ agreements are properly drafted and up-to-date.

Should every employer implement arbitration agreements?

No. The decision to implement an arbitration agreement should be reviewed with an employment lawyer to discuss the positives as well as the negatives of arbitration agreements. As discussed above, there are a lot of benefits of having an arbitration agreement in place, but it does not come without a few drawbacks. The primary drawback is that in California, the employer must pay all of the arbitrator’s fees in employment cases. Arbitration fees can easily be tens of thousands of dollars – a cost that employers do not need to pay in civil cases. However, if the company values the confidentiality and speed of process provided in arbitration, this extra cost may well be worth it.

Stephen Colbert Provides Reminder That Family Medical Leave Is Not A Laughing Matter

Anthony Zaller — Mon, 20 Feb 2012 09:04:57 -0800

It may come as a surprise, but Stephen Colbert is human, and like the rest of us, has a mother. He has taken a leave of absence from his show to apparently spend time with his ailing mother. An article I read recently notes how Colbert’s leave could trigger family medical leave. I thought the article does fine explaining family and medical leave, but given Colbert’s importance to The Colbert Report, it is also a good reminder about a narrow exemption to an employee’s reinstatement rights if they are a “key employee.”

Basic Medical Leave Rights
The Family Medical Leave Act (FMLA), and the California Family Rights Act (CFRA) both provide employees the opportunity to take up to 12 weeks of unpaid leave for certain “qualified” events. Employers with 50 or more employees (part-time employees are counted to make this determination) are covered by the FMLA and CFRA. Employees who have worked for at least 12 months and at least 1,250 hours in the immediately preceding 12 months are covered by the laws. However, employers do not need to provide the leave if the employee works at a location with fewer than 50 employees within a 75-mile radius.

“Key Employee” Exception
If the employee is covered by the FMLA or CFRA the employee is entitled to return to his or her former position, or a position that is equivalent to the previous position held with equivalent benefits, pay, and conditions of employment. The small exception to this is for “key employees.” A key employee is defined as a salaried employee who is the highest paid 10% of employees within a 75-mile radius. If the key employee’s reinstatement would cause “substantial and grievous economic injury” to the employer, then the key employee may be denied reinstatement. However, when the employee takes the leave of absence, the employer must provide notice to the employee that he or she is a “key employee” and explain their reinstatement rights. If the employer fails to do so at the time the employee goes on the leave of absence, it loses the ability to deny reinstatement to the employee under the “key employee” exception.

No need to worry about Colbert though. It is being reported that Colbert will be returning to our televisions tonight.

New Law Effective 2012 Restricts Employers Ability To Conduct Employee Credit Checks

Anthony Zaller — Wed, 08 Feb 2012 18:08:58 -0800

California’s new labor code provision severely restricts an employer’s ability to conduct credit checks on employees. Labor Code 1024.5, which took effect on January 1, 2012, only allows employers to conduct credit checks for employees who meet one of the following categories:

A managerial position.

A position in the state Department of Justice.

That of a sworn peace officer or other law enforcement position.

A position for which the information contained in the report is required by law to be disclosed or obtained.

A position that involves regular access, for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, to all of the following types of information of any one person: (A) Bank or credit card account information. (B) Social security number. (C) Date of birth.

A position in which the person is, or would be, any of the following: (A) A named signatory on the bank or credit card account of the employer. (B) Authorized to transfer money on behalf of the employer. (C) Authorized to enter into financial contracts on behalf of the employer.

A position that involves access to confidential or proprietary information, including a formula, pattern, compilation, program, device, method, technique, process or trade secret that (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who may obtain economic value from the disclosure or use of the information, and (ii) is the subject of an effort that is reasonable under the circumstances to maintain secrecy of the information.

A position that involves regular access to cash totaling ten thousand dollars ($10,000) or more of the employer, a customer, or client, during the workday.

A “managerial position” is defined as an employee who qualifies for the executive exemption set forth in the Industrial Welfare Commission’s Wage Orders. The test of who qualifies as an exempt executive is very detailed, and it is determined by the amount of pay and actual duties the employee performs. So employers need to approach this prong with caution and obtain guidance to ensure the employee actually qualifies as an exempt executive.

The new law also added the requirement under California Civil Code section 1785.20.5 that employers must notify the employee in writing of the basis in Labor Code section 1024.5 as set forth above that applies to permit the employer to perform the credit check. The new law does not change the other obligations already in effect that employers had to comply with prior to conduct a credit check. These obligations include informing the employee in writing that a credit check would be performed, the source of the credit check, and that the employee may receive a free copy of the credit check. Finally, if an adverse employment action is taken by the employer based on the report, the employee must be notified of the name and address of the reporting agency making the report.

Help Needed: Employment Lawyer

Anthony Zaller — Tue, 07 Feb 2012 16:51:50 -0800

That's right, my firm, Van Vleck Turner & Zaller LLP is growing, and we are looking for an employment lawyer with at least seven years of California employment litigation experience. If you or someone you may know is interested, more information about the position can be found here. The ideal attorney should be able to work in an entrepreneurial setting, enjoy the practice of law, and enjoy working with every size of client. Cover letters and resumes can be submitted to me.